Mortgage pre-approval: what it is and how long it lasts

What pre-approval is

Moneysmart's Buying a house page (updated 14 October 2026) says pre-approval "shows how much you may be able borrow" and "doesn't commit you to the loan." You can also hear it called conditional approval or approval in principle. The lender looks at your finances to judge whether you can repay. How it does that is covered in how lenders assess serviceability.

This page does not say what a lender will charge for a pre-approval. Ask.

How long it lasts

Moneysmart says 3 to 6 months. The exact period is the lender's, and some may differ, so read your approval letter. As simple date arithmetic, a pre-approval given on 2 November 2026 would run to about early February 2027 at three months, or early May 2027 at six. Put the end date in your diary.

It is not a guarantee

Final approval comes after you sign a contract. Moneysmart says the lender still assesses your circumstances and the property. The list below is RateSonar's reasoning, not a Moneysmart list, so ask your lender which apply. The loan could be affected if:

• The valuation comes in lower than the price, which raises your LVR. A higher LVR can bring in lenders mortgage insurance, see LMI.
• Your income, job, debts or spending change.
• Your credit report changes. See credit score and your home loan.
• The lender changes its policy or rates before you settle.
• The property does not meet the lender's requirements.

Moneysmart lists what lenders typically look at: savings history, credit report, income and expenses, employment and whether you have a guarantor. These are examples of what can be rechecked.

Credit enquiries

A lender usually checks your credit report to assess you. I did not find an official Moneysmart or ASIC page that states how many enquiries a pre-approval creates, or its effect on your score, so ask the lender whether it will do a credit check and read credit score and your home loan.

How to use it when you bid

1. Treat the pre-approved amount as a ceiling. Moneysmart says it helps you set a realistic price range.
2. Subtract buying costs such as stamp duty, legal fees and inspections, which Moneysmart lists as costs you need to cover as well as the deposit.
3. Check the end date against the auction or settlement timeline.
4. Before an unconditional offer, ask the lender about valuation and any other conditions.
5. Compare the rate you were given with the live home loan rates. The lowest advertised standard variable rate was 5.69% on 2 Nov 2026, the median 6.74%. These are advertised rates, not your approved rate.

Worked example, RateSonar arithmetic with illustrative numbers: say you are pre-approved to borrow $540,000 and you have $60,000 saved. A $600,000 home with a $60,000 deposit is a 90% LVR and exactly at your limit, leaving nothing for duty and fees. A cheaper home leaves room for those costs.

What to ask the lender

• How long does the approval last, and can it be extended?
• What conditions does it carry?
• What would make you withdraw or reduce it?
• Will you check my credit report, and how many times?
• What happens if the valuation is below the price?